The major labels are dying.
… and I don’t care.
EMI in the past year has lost Radiohead, Paul McCartney, and the Rolling Stones from it’s roster. Last week they laid off 2,000 people. The other majors aren’t too far behind either. The word is, jobs at the labels are being lost left and right.
According to Bob Lefsetz of the LefsetzLetter …
Sales in 2007, including both physical and digital, topped out at 500.5 million albums. The peak year was 2000, when 785 million units were sold. So, you’d expect sales of best sellers to drop by approximately one third, or 36.25%, to be exact.
There are are so many reasons for the majors to die. They refused to grow beyond what they had at the peak of music purchasing in 2000. They refused to redraw their business plan when the technology allowed people to get whatever they wanted, when they wanted. They waited for silicon valley to make the easiest, sexiest, and most satisfying method. It turns out that silicon valley would much rather sell ipods than maximize profits on singles.
I was in college from 1999-2003 and I hated file sharing. When I lived in the dorms it was the first time I experienced having a high speed connection every day. I downloaded Napster to my iMac (baby blue, 6gb’s on the HD, 350mHz processor) and I tried to steal as much as I could. As a college student, what you don’t get caught for isn’t really illegal. I loved music more then anything else in the world. My cd collection had been growing substantially, I spent the previous summer following Phish for 3 shows, nothing else seemed to matter but listening to music or playing my trumpet. Napster always gave me nothing but crap. Even when I did find the music that I wanted, it was incomplete, poor quality. Most of the time, I didn’t find anything close to the eclectic tastes I had as a 18 year old (regrettably, I listen to far more mainstream music now).
When iTunes came about in 2001 it was a revelation. I loved the fact that I didn’t have to hike from my dorm room to the Tower Records on University Way to buy a CD if I wanted something right away. I loved the fact that you knew what the quality would be when you purchased it. I loved the fact that you knew it would be the entire song. I still didn’t get into buying any music from the iTunes music store until i received my first iPod in 2003. It held 10gb’s and I loved it. I told everyone I had a new best friend. At the time I was finishing up my music degree from the University of Washington. I remember walking through the halls of the School of Music with my white earbuds in thinking, why the hell does nobody else have one of these. I could listen to essentially anything I wanted to without worrying about hauling 100 cd’s around in my backpack all day.
The major labels have abandon what made them big and great. They built artists careers. They promoted quality musicians. Not junk that sells heavy for a summer and goes away the next (souja boy, wtf??!?). They got greedy and stopped treating it as a record label and started maximizing profits over the short term, rather than long term.
Once record labels lost the main distribution point, they lost the industry. In ten years, two more labels will consolidate and we’ll be left with 3 (not-so major) majors. In ten years, all music that is purchased digitally will be equal in quality to uncompressed music. In ten years, digital sales will account for > 75% of all music sales. In ten years, homeowners insurance will cover hard drive failure for those who don’t back up their music. And most importantly, in ten years, artists will have the ability to make most of the money they earn without paying middle managers in suits at record labels.
The major record label is dead and you should be happy.
Long live Ubiquity, Nonesuch, Concord, Kill Rock Stars, Sub Pop, Okay Player, Rope-a-Dope, and all the other purveyors of quality music.
